H&M responds to China boycott while slashed by state media

Swedish retailer H&M said it hoped to regain the trust of Chinese customers in a statement issued on Wednesday, after facing a boycott over the company’s refusal to use Xinjiang cotton for alleged human rights abuses.

The embattled fast fashion company said they are working with colleagues in China to “do everything they can to manage the current challenges and find a way forward”. 

“China will clearly continue to play an important role in further developing the entire industry,” the statement said.

While the statement did not directly mention Xinjiang cotton or the boycott, it said that the company wants to “be a responsible buyer, in China and elsewhere, and are now building forward-looking strategies and actively working on next steps with regards to material sourcing.”

The response comes as the Chinese backlash continues towards several Western brands including H&M, Nike and Burberry, which have expressed concerns about alleged forced labor in producing Xinjiang cotton and the decision by some to stop using cotton from the region.

In a response to H&M’s statement, Chinese state media CCTV said on the Twitter-like social media platform Weibo that the statement was a “second-rate public relations essay”, deliberately avoiding the important issue and was lacking sincerity. It also said if the company wants to maintain its market position in China, it should show the stance.

The world’s largest fashion retailer after Spanish clothing company Inditex, which owns Zara, has shut 20 stores in China, said the group’s Helena Helmersson during a conference to shareholders. The closure accounts for about 4% of the total 502 stores in China.

Chinese e-commerce platforms including Taobao and JD.com also pulled the brand last week and people could not locate the stores from online maps. Chinese celebrities rushed to cut ties with the brand after the company’s statement issued last year re-surfaced and received criticism from the Communist Youth League and the People’s Liberation Army.

The company has found itself in the middle of the latest dispute over the accused Xinjiang human rights issue such as mass internment of Uighur Muslims in the area which has gathered more international spotlight in recent years. The US, UK, Canada and EU imposed sanctions on Chinese officials related to the detention on Mar.22. China denied all allegations and hit back with sanctions.

China is the company’s third largest market, accounting for 6% of its revenue for the last quarter ended Feb. 28, according to the company’s earnings report issued on Wednesday.

H&M reported a 21% net sales decrease between Dec. 1 to Feb. 28 compared with the same quarter year on year, mainly due to the COVID-19 lockdowns, with more than 1,800 stores temporarily closed around the world.